Photo: Tiffany Von Arnim/Flickr
Demand for housing has remained fairly high in many parts of the US, even as prices continue to increase. However, some markets have seen home inventory shrink, which has created challenges for first-time buyers with tight credit in particular, says a new report by the listing site Realtor.com.
While both supply and demand remain high in some markets, Realtor.com finds that users are jumping onto new listings within “seconds of their initial posting” in many depleted markets. Credit-challenged first-time buyers are affected the most in these markets.
To determine which markets have the fewest homes for sale, Realtor.com looked at the number of homes that were for sale out of a market’s total housing stock in 150 of the country’s largest markets. Next, to establish which markets are worsening, it calculated the percentage decrease in homes for sale from 2015 to 2016.
Some notoriously markets with tight inventories, like San Francisco, did not make the list of the top markets with housing shortages as they are showing signs of easing up. Meanwhile, other more affordable markets are running into trouble as housing heats up, according to Realtor.com
Seattle was the market with the fewest homes for sale recorded in the study, with only 0.4 percent of its housing stock for sale. Startlingly, only one in every 263 homes you see is actually for sale in Seattle. Also, coupled with its double-digit price growth, buyers are locked in fierce competition for a dwindling number of homes. From 2015 to 2016, there was a 13.4 percent decrease in the number of homes for sale.
Eugene, OR is in the midst of its strongest housing market in the last decade. But while demand increased, many homeowners are not selling and moving out,or upgrading their homes. In 2015, the number of homes for sale began to record double-digit declines. Currently, only 0.6 percent of Eugene’s housing stock is for sale. There was a just over 27 percent drop in the number of homes for sale from 2015 to 2016.
Meanwhile, Grand Rapids, MI, which has long been viewed as a “derelict Rust Belt City,” has seen some resurgence in its housing market over the last several years. In fact, twice in 2016 Grand Rapids was named one Realtor.com’s hottest markets. And while buyers are circling, homeowners are reluctant to sell — in some cases concerned about affordability and finding a home in their price range. The number of homes for sale in Grand Rapids decreased 24.7 percent from 2015 to 2016, and currently only 0.7 percent of its housing stock is for sale.
The other markets with the lowest number of homes for sale were Buffalo, NY (0.6 percent), Fort Wayne, IN (0.8 percent), Sacramento, CA (0.6 percent), Detroit, MI (1 percent), Portland, OR (0.6 percent), Santa Rosa, CA (0.4 percent), and Omaha, NE (0.8 percent).
“More than two-thirds of the markets are seeing less inventory now compared to a year ago,” says Realtor.com’s our chief economist Jonathan Smoke.
He also cited tight credit and low levels of new construction as contributing factors.
Click here to read the entire report.